ency of finance during the last century at least has been toward the restricted circulation of metals as the media of exchange, and in the direction of the storing of those metals and the issuing against them of currency or credits in excess of the bullion value of the metals, and the securing of the deficiency in amount between the market value of the metal and the face value of the currency by the deposit of other credits, principally government, state, and municipal obligations. In other words, these last-named obligations have come to the assistance of the metals as a basis for the media of exchange, and have tended to minimize the actual use of metals, whose money use in most civilized countries is now principally as one of the bases of currency.

While gold, in common with other preservative commodities, has increased in relative value to food and clothing products, as the surplus of these products became yearly greater, its increase has not been so great as that of other preservative values. The price of government, state, municipal, corporate, and individual credits has increased in a much greater ratio, bonds bearing a rate of interest which enabled their makers to dispose of them at par fifty years ago would now sell at over 200. Capital generally is so plentiful that nearly all states and countries have reduced the legal rate of interest, and have been enabled repeatedly to fund their interest-bearing securities in others bearing a lower rate. This increase is not confined to securities and credits, but pertains to practically every commodity or article by which value can be preserved. The obvious reason for this enhanced value of preservative commodities, credits, and securities is the enormously increased supply of the necessities of life, owing largely to the rapid development of new areas and the greatly reduced cost of production.

PART II.

PRACTICE OF FINANCE.

CHAPTER I.

Money and Currency of the United States-The New York Sub-Treasury.

Practice. In the succeeding articles the application of the principles previously described, it is assumed, will be readily determined by the reader, without the writer pointing out the particular principles involved in each kind of business discussed.

Money of the United States.-The money of the United States consists of gold and silver coin. Nickel and copper are used for the minor subsidiary coin.

Gold, the coinage of which is unlimited, is legal tender for a period of twenty years from the date of coinage to any amount, when not reduced in weight more than one half of one per cent.

The coins now minted are the quarter eagles ($2.50), 64 grains; the half eagle ($5.00), 129 grains; the eagle ($10),258 grains; and the double eagle ($20), 516 grains, all

900

alloy.

Silver.

one-tenth

(320); 310 gr)

owe-feiff

Toths fine, or nine-tenths pure gold and one-tenth The coinage of this metal is now practically since the repeal in 1893 of the purchasing clause of the

Sherman Act has ceased.

60

Silver in dollar pieces of full weight is legal tender for all purposes and to any amount in the absence of a contract to the contrary. The smaller silver coins are only legal tender to the amount of ten dollars.

000

Coins of the following nominal value, ths fine, are now outstanding: Dollar, value $1.00, weight 412 grains; half dollar, $0.50, weight 192 grains; quarter, $0.25, weight 96,45 grains; and dime, $0.10, weight 3858 grains.

At various times other silver coins have been issued ; thus the Trade Dollar, weighing 420 grains, and by implication a legal tender to the amount of $5.00, coined under the Act of 1873, circulated for about five years, when its coinage was discontinued, and provision made for its redemption at its face value, and for recoinage; the twenty-cent piece, coined from 1873 to 1878; the Columbian half-dollar to the amount of $2,500,000, and the Columbian quarter-dollar to the amount of $10,000, issued in 1892. Three-cent pieces and a half-dime were also coined.

It will be observed that while about $423,000,000 silver dollars have been coined, that less than $54,000,000 were in circulation and over $369,000,000 on deposit in the United States Treasury on April 1, 1895. The reason for this is that the silver coins being too bulky and heavy for extensive use in large amounts, it became necessary for the government to receive them on deposit and to issue in their place silver certificates.

Nickel and Copper. These metals are used entirely for minor coins which are only legal tender to the amount of 25 cents and which are redeemable by the United States `in lawful money in sums of not less than twenty dollars. While at various times half-cents of copper, nickel cents, bronze cents, and two- and three-cent pieces of nickel have been coined; at present only the copper cent, weight 48 grains, and the five-cent piece nickel, weight 77% grains,

are coined. Some of the other coins, however, are still occasionally seen.

Only the one-cent piece (copper) and five-cent piece (nickel) are now coined.

Currency of the United States. In addition to the gold and silver which are legal tender as before stated, a ́large part of the country's currency is also legal tender, and that fact will be indicated in speaking of the particu lar notes.

As previously explained, the currency of the country, excepting gold and silver certificates, is secured by the government's credit and its metal reserve. Of course the metal on deposit with the government against which certificates have been issued, is held exclusively for the redemption of those certificates and is not applicable to any other purpose. The national bank notes are secured by the pledge of the government strengthened by the lawful money reserve required to be kept by the banks of issue and by the United States bonds and the 5% redemption fund deposited by such banks with the Treasurer of the United States to insure their redemption.

United States Notes or "Greenbacks." These notes constitute the balance of the unredeemed forced paper currency issued during the late Civil War, of which a fixed amount, $346,681,006, is outstanding. They are legal tender for all debts, public and private, except duties on imports and interest on the public debt, but being redeemable upon demand in coin, the latter limitation of their legaltender quality is of little effect; in fact, by a regulation of the Secretary of the Treasury they are received in payment of customs and other duties. These notes when received by the government may be re-issued and of course constitute a constant claim upon the government's lawful

money.

United States Treasury Notes. Under the Act of 1890, commonly known as the Sherman bill, these notes were

issued in payment of purchases of silver, and are legal tender for all debts, public and private, except where otherwise stipulated in the contract between the parties. They are redeemable in gold or silver coin at the discretion of the Secretary of the Treasury. In order to maintain a nominal parity of silver and gold, it has been found necessary during the last few years to redeem these notes when demanded by the holder in gold. There are now outstanding $155,000,000 of United States Treasury notes. Gold Certificates are issued in denominations of not less than $20 by the Secretary of the Treasury against deposits of gold coin, which coin shall be retained in the Treasury exclusively for their redemption upon demand. Gold certificates are receivable for customs, taxes, and all public dues, although not legal tender.

Silver Certificates, in $1, $2, $5, and $10, and higher denominations, are issued against standard silver dollars. deposited in the Treasury. They are not legal tender, but are receivable for public dues. As explained in the remarks on silver, these certificates circulate largely in place of the coin and form a large proportion of our

currency.

Currency Certificates (not legal tender) are issued by the United States in denominations of $5000 and upwards upon deposits of currency with the United States Treasury.

National Bank Notes are issued by the Comptroller of the Currency to national banks upon deposit by them of United States bonds with the Treasurer of the United States. The conditions of the issue of these notes and the security by which they are protected are so fully stated in the article on National Banks as to make any repetition. of it here superfluous.

The following table contains a statement of the kinds and amounts of money of the United States and the banks of issue on April 1, 1895: